Miners and motors drive away gloom

Leading shares reached their highest level since mid-February yesterday despite a slump in Britain's GDP, as mining stocks climbed and investors took heart from an opening rise on Wall Street after better than expected figures from Ford.

On the last day of another volatile week which included the budget, the FTSE 100 ended 137.76 points better at 4155.99, a 3.43% gain. The rise accelerated after Ford reported a quarterly loss much lower than analysts had been forecasting, prompting a 120-point increase on the Dow Jones industrial average by the time London closed.

Miners were in demand after Cazenove issued an upbeat note, upgrading its rating on the sector from neutral to overweight. News that China had been buying gold for its reserves also helped sentiment, and pushed the metal to a three-week high at one point. Xstrata was the biggest riser in the leading index, adding 75p to 600p as Cazenove named the company its top tip in the sector, while Exane BNP Paribas was also positive. Among the other miners, Eurasian Natural Resources Corporation climbed 52p to 602.5p, Kazakhmys was up 39p at 515.5p while Anglo American added 97p to £14.22.

Insurers moved higher ahead of a trading update due on Monday from Aviva, up 34p to 273.25p. But British Airways fell 2.4p to 163.9p on concerns that its proposed merger with Spain's Iberia could be threatened by the economic downturn. Both Iberia and German airline Lufthansa have made downbeat comments about trading.

Hotel groups benefited from a positive note from Panmure Gordon. The broker began coverage of InterContinental Hotels, up 38p to 672p, with a buy recommendation, saying: "Although current trading is weak, we see the stock as a great way to play any US recovery given the 70% exposure to the region." It also advised clients to buy Whitbread, 51p better at 919.5p.

Lower down the market, traders noted some speculative interest in phosphate specialist Sunkar Resources, up 4.5p to 16p.

But Victoria Oil & Gas lost 0.78p to 3.9p after a Kazakh court ruled against it in the latest stage of a dispute about the ownership of the Kemerkol oil field in Kazakhstan.

Finally, Regent Inns, owner of the Walkabout bars and Jongleurs clubs, fell 33% to 1.55p as it said it was considering delisting its shares. Mark Brumby at Blue Oar Securities said: "A delisting would allow Regent to restructure in private and, with its market capitalisation as low as it is, under current listing rules most transactions will be Class A and will involve the company and its shareholders in considerable expense."